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How the Poor Spend on Food

About a week ago, Derek Thompson put up a post at The Atlantic with a lot of really interesting graphics on how we spend our money on food and how it has changed over time.

He shows that we spend a lower share of our income on food than ever before and less than anywhere else in the world.  I know there are some who would bemoan his development and wish we were more like the Europeans.  But for real, life flesh-and-blood consumers it has been a boon.  

My family lived in Paris during much of 2011 and we literally spend twice as much on food there as at home.  Yes, we had access to many things in Paris that we don't in Stillwater, Oklahoma but I think I can pretty honestly say that we didn't eat twice as well in Paris as we do in Stillwater.  You have to remember that living in Paris is not the same as vacationing in Paris - you can't eat at 5 star restaurants every night with two kids and still afford to pay the bills.  So, a lot of what we ate - from cereal to salads to baked chicken - was virtually identical to what we'd have at home; only much more expensive. (I will give the French their bread and wine - the two things that were much tastier and less expensive than at home).   

But, I digress.  The issue I want to point out relates to the focus of the Atlantic piece on how the poor spend their money on food relative to the rich.  The author shows that from 1984 to 2011, the lowest 20% of families spent 16.1% of their income food and that figure remain unchanged over the time period, but for the highest 20% of income earners, in 1982 13.2% of income was spent on food and it fell to 11.6% by 2011.  He says:

In the last three decades, food's share of the family budget has fallen for all but the poorest families, where it's stayed the same

The first thing to note is that the observation that the poor spend a larger share of their income on food is very old news.  In fact it is something of an economic "law" - Engel's Law - postulated by Ernst Engel in the mid 1800s.  Moreover, because the economic gains at the bottom 20% haven't been terribly pronounced over this time period, it probably isn't that surprising to see that the % they spend on food hasn't much changed either.  However, it is important to note that these are not the same families being compared in 1984 and 2011.  I would suspect the bottom 20% include a lot of really young people and a lot of really old people in 1984 who today are in better paying jobs (or no longer living).  

Not only are these not the same people, it is not the same food being eaten in 2011 as in 1984.  In the conclusion, the author notes:

we can't rule out that the lowest-income households only spend one-sixth of their money on food, not only because real food prices are falling, but also because they're forced to consume less, as mortgages and gas prices eat into the budget.

Yes, but we also can't rule out that the poor are getting more for their money today then they did in 1984.  The author shows some interesting graphs of total spending on food at home and away from home by the relatively poor and rich in (I assume) 2011 but what isn't shown is how that has changed over time. 

Has total spending among the poor gone up or down in real terms?  Are the poor eating out more than they once did?  I'm not at all surprised to see that the rich eat out more than the poor in 2011, but the better question is whether the poor in 2011 are eating out more than the poor in 1984.  

I wasn't even yet a teenager in 1984 but if memory serves me right, it was about that time we got our first microwave (and our first dishwasher I believe).  Over the intervening years, the grocery store has grown and the available flavors, brands, and variety has grown enormously.  In short, the quality of food (including taste, convenience, etc.) has changed a lot from 1984 to 2011.  

As a result, I'm not nearly as worried by statistics showing that the percent of income spent on food by the poor hasn't changed over time as I am about statistics showing potential increases in hunger among the poor.  

Moreover, if we really want to worry about the poor and hungry, we should look outside the U.S.